To say that the past few years have been financially challenging would be an understatement. To further say that we are clear of future foreclosures and that where we live doesnt matter when it comes to qualifying for bank loans is simply not true. The 30th Congressional district of Texas, like many communities, is diverse, and its residents should not be denied bank loans because of where they live.

The Community Reinvestment Act came into existence to protect people from housing discrimination.

President Jimmy Carter signed the CRA in 1977 to establish a system to monitor and rate whether banks and thrifts (thrifts are depository institutions like savings banks and savings and loan associations) meet a variety of needs that include financing for rental housing, home mortgages and small-business startup and expansion costs. The CRA encourages prime lending by offering banks incentives for its foreclosure prevention efforts, counseling loan recipients, modifying loans and investing in finance loan modification.

The CRA also penalizes banks through reduced CRA ratings that result when banks are caught practicing discriminatory loan practices  not lending to all of their qualified customers. Currently, the CRA only applies to banks and thrifts; however, the CRA does not apply to other financial institutions that lend money, such as bank affiliates, independent mortgage companies and credit unions.

To solve this issue, I introduced H.R. 1479, the Community Reinvestment Modernization Act. My legislation strengthens the existing CRA by expanding it to all lending institutions. I believe the Community Reinvestment Modernization Act will help restore integrity to and trust in our financial system. The legislation will also strengthen the accountability of banks, address racial disparities in lending, penalize banks that engage in predatory and abusive lending practices, and require federal regulatory agencies to hold more public hearings and meetings when banks merge.

Since 1977, the CRA outlays have totaled more than $6 trillion for reinvestment and more than $407 billion in community development loans. These outstanding numbers prove the CRAs value to our financial system.

Although many people have tried to blame the CRA for the housing market meltdown because it enables low- and middle-income people to receive loans, the facts state otherwise:

 At least 75 percent of subprime loans originated at independent mortgage companies and bank affiliates, and neither of them are covered by the CRA.

 Most subprime lending occurred between 2003 and 2007, well after the CRA was introduced in 1977.

Supporting the improvements to the existing CRA means fewer home foreclosures and more stable neighborhoods.

Rep. Eddie Bernice Johnson (D-Texas) is the sponsor of the Community Reinvestment Modernization Act.